Portugal plans fines of up to €2.5m over board gender rules

Portugal’s government plans to revise the law on gender balance at listed companies, introducing fines of up to €2.5 million for breaches and giving CMVM, the Portuguese securities market regulator, responsibility for enforcement. The move adds a formal sanctions regime to board diversity rules already in force.

Under the draft law sent to parliament, companies listed on the stock exchange that still do not meet the minimum 33.3% threshold for the under-represented sex on management and supervisory bodies will have to follow stricter selection procedures for new appointments. Those processes must use pre-defined criteria allowing candidates to be compared on aptitude, competence and professional performance, with criteria that are clear, objective, neutral and applied without discrimination.

If candidates have equal qualifications, preference should be given to the under-represented sex unless there are legally weighty reasons to choose another candidate. A listed company that fails to comply with these selection rules could face a serious administrative offence, with fines ranging from €12,500 to €2.5 million under Portugal’s securities code. Companies that already comply with the 33.3% threshold will not be subject to the stricter selection process.

The proposal also creates new annual reporting duties for all listed companies. They will have to tell CMVM the number and percentage of women and men in leadership positions, explain why the 33.3% threshold has not been reached where applicable, and set out measures taken to meet it. Failure to submit or publish that information could trigger a less serious offence, with fines of between €5,000 and €1 million.

The draft would also change how penalty revenue is distributed. Instead of being split between the Commission for Citizenship and Gender Equality, CMVM and the state, all proceeds from the new fines would go to the state budget. The current law, in force since 2017, has required listed companies since 2020 to ensure that at least 33.3% of members of their management and supervisory bodies come from the under-represented sex.

Originally published at Eco.pt